Bloomberg News

Japanese Stocks Decline as Chinese Imports Miss Estimates

July 10, 2012

July 10 (Bloomberg) -- The Nikkei 225 Stock Average (NKY) fell a fourth day, the longest losing streak in a month, after China’s imports grew at about half the pace economists expected, fueling concern a slowdown is deepening in Japan’s biggest overseas market.

Komatsu Ltd. (6301), a machinery maker that gets 14 percent of its sales in China, lost 3.5 percent. Nikon Corp. lost 7 percent after Intel Corp. said it will invest in a rival of the Japanese chip-equipment maker. Sharp Corp. (6753) lost 4.2 percent after the maker of liquid crystal displays agreed to pay almost $200 million to settle a price-fixing suit.

The Nikkei 225 dropped 0.4 percent to close at 8,857.73 in Tokyo, capping a four-day loss, the longest streak since June 4. The broader Topix Index lost 0.7 percent to 758.60, with about two stocks sliding for each that rose.

“I don’t think China is serious about economic stimulus because it focuses on cracking down on high property prices rather than shoring up growth,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., which oversees about 15 trillion yen ($189 billion). “I have been saying for a while that the Nikkei’s upper limit is 9,000.”

The Topix rebounded about 9 percent since June 4, when it closed at its lowest since 1983, after euro leaders agreed to ease banks’ access for bailout funds and as speculation mounted central banks around the world will ease policy.

The advance has boosted the average price of shares on the Japanese gauge to 0.9 times book value, compared with 2.1 times for the Standard & Poor’s 500 Index and 1.4 times for the Europe Stoxx 600 Index. A number below one means investors can buy companies for less than the value of their assets.

China Trade

Stocks lost early gains after a report China’s customs bureau said imports increased 6.3 percent in June from a year earlier. Analysts had expected an 11 percent gain, according to a Bloomberg survey.

Exporters to China fell. Komatsu lost 3.5 percent to 1,818 yen. Fanuc Corp. (6954), which supplies robots for mainland factories, slid 1.5 percent to 12,550 yen.

Stocks started the day higher after Europe agreed to speed loans to Spain’s troubled banks. Finance ministers from the 17 euro zone nations reached an agreement to make 30 billion euros ($37 billion) available by the end of the month, Luxembourg Prime Minister Jean-Claude Juncker said.

European policy makers “come out with nice, encouraging things, and the market has a bit of rally,” said Matt Riordan, who helps manage about $6.5 billion at Paradice Investment Management Pty. in Sydney. “Then, immediately it becomes clear that there’s a long-term timeframe and you tend to find disagreements among different countries.”

Spanish Yields

Futures on the S&P 500 Index (SPXL1) slid 0.4 percent today. The gauge fell 0.2 percent in New York yesterday after yields on Spain’s 10-year bond rose above the 7 percent threshold that prompted bailouts in Greece, Ireland and Portugal.

Trading volume on the Nikkei 225 was about 20 percent below the 100-day average ahead of Bank of Japan policy decision July 12.The Nikkei 225 Volatility Index (VNKY) fell 2 percent to 19.80, indicating traders expect a swing of about 5.7 percent on the benchmark gauge over the next 30 days.

Nikon, Japan’s biggest maker of chip lithography equipment, dropped 7 percent to 2,336 yen. Intel, it’s second-biggest customer, said it will invest as much as $4.1 billion in ASML Holding NV.

“We interpret the move as Intel throwing in the towel on Nikon,” Pierre Ferragu, a London-based analyst at Sanford C. Bernstein Ltd., wrote in a note.

Sharp lost 4.2 percent to 362 yen after agreeing to pay $198.5 million to Dell Inc. and two other companies to settle a price-fixing suit.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at

To contact the editor responsible for this story: Nick Gentle at

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